TechAmerica sues rival ITI after lobbyist shuffle

Washington-based trade group TechAmerica is suing a rival, the Information Technology Industry Council, arguing that lobbyists poached by ITI accessed and used their former employer’s confidential documents.

In a lawsuit filed in D.C. Superior Court on Friday, TechAmerica says that three of the employees it lost this week to ITI — which represents companies like Apple, Google and Microsoft — conspired in their new positions to use old contacts and other information acquired while at TechAmerica to help ITI find new clients for its neophyte effort focused on government procurement.

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ITI was not immediately available to comment for this story.

For example, one former TechAmerica employee, a day after she resigned from the group, accessed her company-issued laptop despite promising to return it, according to the complaint. She used the device to ask “the TechAmerica members to become ITI members,” the suit continues.

TechAmerica is now seeking a temporary restraining order and preliminary injunction to protect what it believes is a risk to its trade secrets — as well as at least $5 million in compensatory damages on top of whatever punitive awards it can obtain from the court.

“To put it simply, there is a right way and a wrong way to leave a job. We don’t begrudge anyone for wanting a change but perpetrating illegal acts on your way out is not the way to do it,” said Dennis Stolkey, chairman of TechAmerica’s board, when asked about the document. “These three individuals and ITI have attempted to damage TechAmerica’s service to its members through unlawful means. That is not acceptable.”

TechAmerica’s aggressive lawsuit is sure to rattle the already fractious D.C. tech scene, which finds itself in a major moment of flux. Tech companies like Google, Facebook and Microsoft are realizing more than ever that they must pay attention to Washington, and each has spent increasingly bigger bucks to make its interests known to regulators.

While those forces have helped drive an explosion in the number of tech trade groups trying to lobby the federal government, it’s also meant increased competition for influence, allies and yearly membership dues.

Those trade winds had pushed TechAmerica, ITI and a third group, TechNet, to the negotiating table to consider a merger last year. TechAmerica at one point had been the most forceful, public advocate of such a move, coming off a 2011 tax year in which the group lost $2 million, according to its filing. But TechAmerica soon pulled out of the talks and ultimately chose to select a new CEO, Shawn Osborne, while proceeding with a reorganization. Talks between ITI and TechNet also soon collapsed

ITI then announced this week that it had hired four key lobbyists from TechAmerica, including Trey Hodgkins, TechAmerica’s government relations voice. And in a move designed to open both new business and advocacy lanes, ITI unveiled a campaign focused explicitly on government procurement — an issue that forms the core of TechAmerica’s businesss.

TechAmerica’s 12-page complaint, filed late Friday and obtained by POLITICO, details at length the whirlwind speed at which the group lost its lobbyists to ITI. The filing notes that four employees — Hodgkins, Pam Walker, Carol Henton and Erica McCann — all resigned Monday at about 4 p.m., effective immediately. The next day, ITI announced those hires at a news conference while unveiling its procurement initiative. The TechAmerica complaint states that ITI told those staffers it would hire them if a dozen of ITI’s company members each put up $50,000.

The lawsuit claims three of those former employees — Hodgkins, Walker and Henton — inappropriately accessed confidential information in the first days in their news roles at ITI. McCann is not named in the suit.

Henton, who’s based in California, “frequently used” a TechAmerica-issued laptop she promised to return, according to the complaint. On the computer, Henton “had previously downloaded confidential and proprietary documents to the laptop’s hard drive, which she accessed following her resignation.” And TechAmerica contends she relied on those documents and emails to encourage TechAmerica members to join ITI — and that she did so “at the direction of Mr. Hodgkins,” who’s leading ITI’s new procurement push.

With Walker, TechAmerica contends she inappropriately accessed data related to her former leadership of its Health Services IT Advisory Group, a group of TechAmerica members that is working on “health information advocacy.” The group says Walker used her knowledge of its members, which is confidential, to try to reconstitute it at ITI.

Ahead of filing the lawsuit, TechAmerica also sent ITI a cease and desist to ensure its new employees don’t continue to use the allegedly stolen documents, sources told POLITICO. But the group still plans to put up a fight.

“As a member-led organization, we are not going to sit idly by and have our organization diminished because of the illegal acts of a few,” Stolkey said in a statement. “Our members have put their intellectual and monetary resources into building TechAmerica over many years. We owe them a duty to defend their investments and interests from the unlawful actions of a few disgruntled individuals.”